Balance Sheet (also called Statement of Financial Position) consists of three things:
1 ASSET : Total valuable things that company owned
2 LIABILITY : Money borrowed from debtors
3 EQUITY: Money received from shareholders and previous years earnings
The relationship between these three things are:
ASSET= LIABILITY+ EQUITY
*A company use the money borrowed from creditors (LIABILITY) and money received from shareholders and previous years earnings(EQUITY) to buy valuable things (ASSET)
ASSET can be further divided into 2 parts:
1 NON-CURRENT ASSET : Asset that can not be turned into money within one year
2 CURRENT ASSET : Asset that can be turned into money within one year
LIABILITY can be further divided into 2 parts:
1 NON-CURRENT LIABILITY : Liability that must be paid off to debtors in more than one year
2 CURRENT LIABILITY : Liability that must be paid off to debtors within one year.
1 ASSET : Total valuable things that company owned
2 LIABILITY : Money borrowed from debtors
3 EQUITY: Money received from shareholders and previous years earnings
The relationship between these three things are:
ASSET= LIABILITY+ EQUITY
*A company use the money borrowed from creditors (LIABILITY) and money received from shareholders and previous years earnings(EQUITY) to buy valuable things (ASSET)
ASSET can be further divided into 2 parts:
1 NON-CURRENT ASSET : Asset that can not be turned into money within one year
2 CURRENT ASSET : Asset that can be turned into money within one year
LIABILITY can be further divided into 2 parts:
1 NON-CURRENT LIABILITY : Liability that must be paid off to debtors in more than one year
2 CURRENT LIABILITY : Liability that must be paid off to debtors within one year.
Balance Sheet Template
Furher Info:
"Asset"
"Liability"
"Equity"
"Asset"
"Liability"
"Equity"
Balance Sheet Template
ReplyDelete